Letter from the Board of Directors

With this result, the Vetropack Group proves its resilience in a difficult environment. However, the downturn in net sales from goods and services reflects the persistently tense market situation. The result is due, on the one hand, to lower energy costs – which directly influence sales prices – and, on the other, to price pressure resulting from excess capacities in the market. This price pressure is also reflected in the Group’s adjusted EBIT: at CHF 58.6 million, this figure is 37.2 percent down year-on-year. There was a corresponding decrease in the adjusted EBIT margin, from 10.4 percent in 2023 to 7.0 percent in the year currently under review. Cash flow in the last fiscal year was CHF 103.6 million; this represents a year-on-year reduction of CHF 26.5 million, equivalent to 20.4 percent. The cash flow margin shrank by 2.2 percent year-on-year, bringing the figure to 12.3 percent. Net profit is also impacted negatively by the one-off costs of CHF 24.3 million in connection with the closure of the St-Prex plant; at CHF 13.7 million, this figure is significantly below the prior year’s level of CHF 63.3 million.

Overview of central results and key figures for the 2024 fiscal year:

Whereas the high investment costs in 2023 (CHF 238.0 million) were still influenced primarily by our new plant in Boffalora sopra Ticino, the investment total in the 2024 fiscal year returned to a level of CHF 90.3 million – which is appropriate for our industry. Thanks to a consistent focus on working capital, the Group achieved cash inflow after investments of CHF 46.4 million (2023: CHF –164.1 million). These resources were utilised to reduce debt by EUR 50 million. This led to a decrease in total assets and resulted in a gearing ratio of 61.3 percent, which is 1.9 percent higher than in the previous year. This shows that the Vetropack Group is generating capital even in difficult times, and is solidly positioned to face the future. The number of employees fell slightly, due mainly to the closure of the plant in St-Prex. As announced, moreover, we took a very cautious approach to creating new jobs and making new appointments to existing positions.

Closure of the plant in St-Prex

The most difficult decision for us in 2024 was the closure of our production site in St-Prex, Switzerland. Regardless of the tense situation on the market at present, a consultation process lasting almost two months – together with in-depth reviews – showed that the plant’s future prospects remained negative in terms of economic viability and competitiveness, even in the event of multi-million investments. Profitable operation would not have been possible in the long term, so the closure of production was unavoidable.

Regrettably, a large number of the jobs at the site also had to be cut. A social plan was therefore drawn up for the affected employees, including features such as severance payments, bonuses, and benefits for possible early retirement. In addition, we set up our own Job Centre to support our employees in their search for new positions.

As drastic as the closure of this last Swiss plant was for us as a Group, it certainly does not mean that we are withdrawing from our home market. Our Swiss customers are linked to us by good relationships that often go back decades – and we shall continue to maintain these relationships going forward. Bülach will remain as our company headquarters, and our commitment to glass collection in particular will continue undiminished.

Developments at our sites

From the Group perspective, one pleasing feature of the past fiscal year was the development of capacity utilisation in our plants. Despite our strict cost management, we were also able to complete important projects at many locations in 2024. Without exception, all of these were essential investments that also form the basis for innovation and for the Group’s ongoing development.

Back in January, for instance, we already commissioned the rebuilt melting furnace for producing coloured glass at our Czech plant in Kyjov, as well as two state-of-the-art servo-driven NIS production machines and one AIS machine. Another major step followed in September: at Hum na Sutli (Croatia), one of the three furnaces and the related glass-blowing machines were modernised; they were commissioned in December, together with another NIS machine. Our new Italian plant in Boffalora sopra Ticino also picked up speed over the course of the year after some start-up difficulties. The new fully-automated warehouse was opened there in September.

Award-winning innovation

2024 also saw us adding another chapter to the success story of our lightweight bottles made of thermally tempered glass. They were showcased to a wider trade audience at BrauBeviale 2024, and they also caused a sensation beyond the industry: for the second time, we were nominated for the Swiss Packaging Award and we were also honoured with the 2024 Austrian State Prize for Smart Packaging.

The thermally tempered lightweight glass bottles developed by the Vetropack Group number among the most important product innovations of recent decades in our market. They express our understanding of our own identity, and our Strategy 2030+, with ‘Drive innovation’ and ‘Clearly sustainable’ as key cornerstones of our strategy.

In the coming months, the first plant for industrial production of lightweight glass bottles made of thermally tempered glass will go into operation at our Innovation Centre in Pöchlarn, Austria. This is a significant step because it will give us an even better ability to tap new markets and acquire new customers with our thermally tempered lightweight glass in the future.

Key sustainability milestones reached

In spite of our strict cost-cutting programme, we continued to drive our sustainability activities ahead across all our sites in 2024. Focal points in this context were reducing our CO₂ footprint – which also involves making use of renewable energies in our production – and stepping up our recycling activities.

We reached one outstanding milestone in August: the Science Based Targets initiative (SBTi) reviewed and validated the science-based emission reduction targets defined by Vetropack. By doing so, this global body confirms that the targets submitted in April of this year are in line with the SBTi’s strict scientific criteria. Vetropack’s plans to reduce Scope 1 and Scope 2 emissions were deemed to be compliant with the goal of limiting global warming to 1.5 degrees Celsius.

In the area of renewable energies, moreover, we installed and commissioned photovoltaic systems at our Austrian site in Kremsmünster and in Croatia during 2024. Also in Croatia, we launched a pilot project on digital recycling during 2024, together with the European Container Glass Federation (FEVE) and other partners. In particular, this project aims to achieve a higher collection and recycling rate in the Croatian glass recycling system.

Outlook for the 2025 fiscal year

We are currently witnessing the first signs of an easing – albeit not a normalisation – of the market situation. In 2025, we will still be operating in a world with enormous potential for crises. The last few years have clearly shown that our markets often react sensitively to small changes. Various imponderables still remain, including in particular the further progress of the war in Ukraine as well as the potential impact of the new US administration’s economic policy on the global markets.

In this challenging environment, it is more important than ever to stay on the course we have set. In practical terms, this means reacting quickly and promptly to changes, pursuing a prudent investment and personnel policy, and ensuring proactive management of production capacities. Our aim is to create all the conditions that will enable us to act quickly and ramp up our production when the market situation improves and demand increases.

We expect a tentative recovery of the markets in the course of 2025 and below the line, therefore, we anticipate a slightly better operating result than in 2024. As the one-off costs incurred due to the plant closure in St-Prex will be eliminated in 2025, we expect net profit to be significantly higher. However, volatile energy costs continue to be an element of uncertainty whose impact on the Group’s result cannot yet be foreseen.

Our CEO, Johann Reiter, will retire at the end of 2025. Succession planning is in progress, and the Board of Directors will provide information about this in due course.

Annual General Assembly of Vetropack Holding Ltd

The 56th ordinary Annual General Assembly of Vetropack Holding Ltd will take place on Wednesday 23 April 2025 at 3:30 pm in the Vetropack Hall, Im Guss, Schaffhauserstrasse 106, 8180 Bülach.

The Board of Directors will propose to the Annual General Assembly that dividends are paid out as follows: a gross dividend of CHF 1.00 per class A registered share (2023: CHF 1.00), and a gross dividend of CHF 0.20 per class B registered share (2023: CHF 0.20).

Sincerest thanks!

The Board of Directors thanks all our employees for their excellent collaboration and enormous dedication in the 2024 fiscal year. We also thank our customers, suppliers, business partners and shareholders for their trust and support.

Bülach, 17 March 2025

Claude R. Cornaz

Chairman of the Board of Directors

Johann Reiter

CEO